Arts in Britain Weather a Financial Storm

The London Philharmonic Orchestra has lost 850,000 pounds of public funding from its 10 million-pound annual budget. It is filling the gap with private funding.Credit
Benjamin Ealovega

LONDON — British chancellors of the Exchequer don’t spend too much time or effort on the problems of the arts world. So when the current chancellor, George Osborne, met privately with a group of leading arts administrators back in January, it was an unusual event, sparked by unusual circumstances: a precipitous drop in public funding for the arts.

The meeting was intended to convey the message that the government of Prime Minister David Cameron understood the difficulties the arts executives faced — and, for some present, the message came through. John Gilhooly, chairman of the Royal Philharmonic Society and chief executive of Wigmore Hall, recalled it as “extremely positive.” Mr. Osborne “made no promises, but gave us the impression he was on our side.”

Impressions, though, are cheap. And since that feel-good gathering, nothing much has changed to make life easier for anybody present. As the government has made deficit reduction a priority and budget cuts its weapon of choice, all sectors of the economy have been affected without exception. Public funding for the arts has fallen by 14 percent in real terms, allowing for inflation, from the 2010-11 budget year to 2013-14 — roughly in line with cuts in social welfare.

And sending a chill wind along the corridors of many an arts organization is the chancellor’s threat that, if his Conservative party wins the next general election next year, everyone will be in line for a share in 25 billion pounds, or $42 billion, of still more cuts by 2017-18.

Adding to the cash-flow problems of orchestra managers in particular is the fact that, while audiences for concerts have increased over the years 2003-12 — a strange but standard feature of tough times, when music seems to offer solace — box-office receipts have fallen by 11 percent because so many tickets are discounted, according to a recent survey by the Association of British Orchestras, a trade group.

But for all that, British arts executives display a sort of wartime spirit that refuses to admit defeat. “If you succumb to gloom, you shouldn’t be in this business,” said Douglas Scarfe, chief executive of the Bournemouth Symphony Orchestra.

The B.S.O. is a provincial band, far from the lights of London and easily overlooked, although it is one of the busiest orchestras around, giving 150 performances a year over a territory that stretches across six counties to the west of England.

As the orchestra is on the road most of the time, its funding comes from eight different local authorities, six of which significantly cut their grants between 2009 and 2014, one by 100 percent in 2011. As a result, the orchestra has lost £400,000 a year from its operating budget of £6 million and copes with that loss by running a deficit: a dangerous maneuver, financially speaking.

But so far, the B.S.O. has not canceled any concerts or clawed back its artistic program.

“To do fewer dates is to become less relevant,” said Mr. Scarfe, whose recommended method for adapting and surviving involves “getting smarter, more ingenious in the way we work.”

The orchestra has worked to increase its visibility through a relationship with the popular Classic FM radio station. It has a new website. It is exploring more flexible ways to service the region it covers, sending out smaller, more cost-effective chamber-size groups of players, rather than making every concert a full symphonic showcase.

Above all, it has rethought the way it pursues private donations, doubling the size of its development team and taking more trouble to target the right people with the right projects.

Spending more time and energy on fund-raising is also Mr. Gilhooly’s strategy at Wigmore Hall, which was part-supported by the London Borough of Westminster until the borough council cut funding for the arts entirely: a measure that caused serious resentment in the local cultural community.

Wigmore Hall has “bucked the trend,” Mr. Gilhooly said, by putting more effort into finding private donors. “The lesson for arts managers in these times is that, however much it impacts on the more elevated things you see as your job description, you’ve got to be out there, day and night, chasing checks — and more strategically.”

At the Wigmore, he continued, “it’s a matter of standing in the foyer, finding out who’s in the audience, and getting to know them beyond the usual suspects. It can be the quiet 40-year-old who never speaks and never gets approached who turns out to be the wealthiest person in the room. But you have to know that, check the postcodes on the bookings, do your homework. And above all, be prepared to knock on doors that were closed to you last time round.”

Knocking on closed doors and being more direct — “we talk to people now about remembering us in their wills, which would have been too sensitive 10 years ago,” Mr. Gilhooly said — has paid off. Wigmore Hall has amassed £1 million toward a new endowment plan, something it never had before.

The London Philharmonic Orchestra which has lost £850,000 of public funding from its £10 million annual budget, is trying to follow in Wigmore Hall’s footsteps. The orchestra has raised private giving from £750,000 a year to £2.1 million a year in the 10 years between 2003 and 2013 — an achievement its chief executive, Timothy Walker, attributes to “getting up earlier and running faster.”

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But he added that “however hard we work on getting those checks, we’re ultimately up against the problem that the U.K. government doesn’t offer donors anything like the tax breaks they’d get in America.” In the United States, a donor can expect a 100 percent deduction on most gifts, while in Britain the deduction is a maximum of 25 percent — and nothing at all if the giver earns under £40,000 a year.

“Until that changes, British arts organizations will never be able to adopt the American model of reliance on private giving, because there’s not enough incentive for the wealthy,” Mr. Walker said.

In the meantime, the London Philharmonic is trying a variety of solutions to plug its funding gap. It has changed its board structure to include fewer musicians and more business leaders in the hope of making better business contacts.

And it is pursuing commercial work — recording video-game soundtracks and film scores, and promoting concerts of the kind that carry no artistic kudos but make money. “Angry Birds Goes Classical,” a chirpy piece of musical banality on disc, is an example Mr. Walker does not flinch from citing. And he does so knowing that the L.P.O. needs to earn 60 percent of its own operating costs. As every “serious” London concert makes a loss, that income has to come from somewhere.

One additional solution for his orchestra is to take on more foreign tours, chasing fee levels it couldn’t hope to earn at home for the simple reason that foreign promoters pay better and ticket prices tend to be higher. In 2007-8 the L.P.O. played 39 programs in London; in 2014-15 it will be down to 30. Meanwhile, the number of overseas tours per year has more than doubled, from 22 in 2006-7 to 45 in the current season.

Other major orchestras have followed suit. “You can’t pass through an airport these days without running into orchestral managers on their way to negotiate another tour,” Mr. Gilhooly of Wigmore Hall said.

For opera companies the situation is now much the same: increasingly, the only way to fund a new show is to co-produce it with an opera house abroad.

Sir Nicholas Kenyon, chief executive of London’s Barbican Center, said that the prestige of a venue like the Barbican allowed it to extract more value from the deals it strikes with incoming performers. Though relatively privileged, thanks to support from neighboring institutions in the City of London financial district, the Barbican nonetheless faces a 7 percent cut in its budget, which it handles by restructuring its relationship with the orchestras that play there.

“In the past,” Mr. Kenyon said, “we booked the players, paid for everything, then tried to recoup the money from the box office. But now we’re more about sharing risk, in partnership with orchestras that can bring something to the table and develop a project, maybe in residency. We’re not so interested in one-night stands.”

And like many other executives in British music, Mr. Kenyon is not interested in over-caution, either. He insists that he remains artistically ambitious, eager to bring new work into the Barbican rather than bunker down into the safety of core repertory.

But composers see things differently. The national agency that represents their interests, Sound & Music, says that commissions for new work from major orchestras have decreased dramatically over the past five years, to the point where new scores are sometimes being written for nothing more than the chance of a performance.

“Composers are an easy target for tight budgets,” said Susanna Eastburn, chief executive of Sound & Music. “Even the major figures find it hard, now, to get work. And when they do, the fees are cut, rehearsals are reduced, the piece gets played just once, and they’re expected to be grateful.”

She acknowledged, though, that there might be a silver lining to the cloud. “Realizing they can’t sit around waiting for the phone to ring, composers have become more entrepreneurial, setting up their own artist-led events as a platform for their work and doing the organizing, producing and promoting as well as the writing,” she said. “It has created a new kind of energy to which audiences are responding well, and a potential for something interesting and good to emerge from this crisis, hard as it’s been.”

“The arts are a resilient sector, used to operating on the smell of an oily rag,” Mr. Walker of the London Philharmonic said. “But what we’ve been going through has really challenged us to be inventive, to come up with better ways of working.”

Mr. Kenyon of the Barbican takes that sentiment a step further. “This had to happen, and we’ll come out of it leaner and fitter,” he said of the current economic crisis. “Not that we weren’t pretty lean to start with. But it does depend on how long the economy takes to turn around. Personally I can’t see the next five years being anything but hard. So we have to hang on. And we will.”